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Notes to the Financial Statements
Washington H. Soul Pattinson and Company Limited
Annual Report 2016
94
Taxation
NOTE 19
DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES (continued)
19
Key Estimate
Deferred tax assets
Deferred tax assets have been recognised relating to carried forward capital losses, income losses and temporary
differences, based on current tax rates. Utilisation of capital tax losses and income losses requires the realisation
of capital gains and taxable income respectfully, in subsequent years and the ability to satisfy certain tests at the
time the losses are recouped. The actual tax results in future periods may differ from the estimate made at the
time the deferred taxes are recognised.
Deferred tax liabilities temporary differences
attributed to:
2016
2015
$’000
$’000
Amounts recognised in the income statement
Property, plant and equipment
1,897
14,591
Mine reserves
–
345
Capitalised exploration
92,681
90,013
Inventories
6,619
6,933
Investments
163,067
105,687
Receivables
44
440
Other
3,929
5,192
268,237
223,201
Amounts recognised directly in equity
Long term equity investments
76,640
90,684
Property, plant and equipment
9,662
7,160
Cash flow hedges
694
–
Other investments
5,367
9,444
92,363
107,288
Total deferred tax liabilities
360,600
330,489
Set-off of deferred tax liabilities pursuant to set-off provisions
(120,562)
(77,447)
Net deferred tax liabilities
240,038
253,042
Movements:
Opening balance 1 August
330,489
342,287
Charged/(credited) to the income statement – operating profit (note 18a)
36,753
(12,493)
(Credited)/charged to equity (note 18c)
(17,497)
695
Amounts recognised on acquisition of businesses
10,855
–
Closing balance at 31 July
360,600
330,489
It is important to note, that the deferred tax liability recognised above does not represent the total tax that
would be incurred if all assets of the Group were to be disposed. This is predominately due to subsidiaries and
the associate entities not being carried at their market value in the consolidated financial statements. The market
values of the listed investments together with the estimate of capital gains tax payable thereon is set out in
note 1, Parent company financial information.